Acting Defense Secretary Patrick Shanahan blasted China in a speech to national security leaders in Singapore on Saturday.
In his first major speech on the international stage, Shanahan denounced China's efforts to steal technology from other nations and militarize man-made outposts in the South China Sea as a "toolkit of coercion."
He didn't name China in early parts of his speech to the Shangri-La Dialogue, a national security conference, but made his target clear by referencing Beijing's campaign to put advanced weapons systems on disputed islands in the region.
"Perhaps the greatest long-term threat to the vital interests of states across this region comes from actors who seek to undermine, rather than uphold, the rules-based international order," Shanahan said.
"If these trends in these behaviors continue, artificial features in the global commons could become tollbooths. Sovereignty could become the purview of the powerful," he added.
A senior Chinese military official hit back, accusing the U.S. of "harming regional peace and stability."
"He (Shanahan) has been expressing inaccurate views and repeating old tunes about the issues of Taiwan and the South China Sea," Shao Yuanming, a senior official of the People's Liberation Army, told reporters after Shanahan's speech.
Shanahan's comments come amid rising tensions between the U.S. and China.
The Trump administration has been waging a trade war with Beijing, imposed sanctions on the tech giant Huawei and agreed to sell weapons to Taiwan, a sovereign island that mainland China claims as its own territory.
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The speech marks Shanahan's first major address on the international stage while he awaits nomination for permanent secretary, which has not been sent to Capitol Hill by President Donald Trump.
It also set the tone for U.S. military cooperation and influence in the Indo-Pacific for nervous allies who fear the economic impacts of the ongoing trade disputes.
Shanahan rejected suggestions that the U.S. is in a "faceoff" or trade war with China and said economic negotiations with Beijing are ongoing and the Pentagon is building relations with the Chinese military. But he said he would be more critical of China than previous defense secretaries.
"I won't apologize for the way I framed some of my remarks, but we're not going to ignore Chinese behavior," Shanahan said ahead of his speech. "I think in the past people have kind of tiptoed around that. It's not about being confrontational, it's about being open and having a dialogue."
Shanahan also met with Chinese Defense Minister Wei Fenghe on Friday. It's the first time since 2011 that China has sent a top-level leader to Shangri-La.
The pair agreed to improve communication and deepen exchanges and cooperation between U.S. and Chinese militaries. It's a significant shift from the rhetoric of both Chinese President Xi Jingping and a former U.S. general last year that indicated the possibility of a shooting war.
The U.S. has been critical of China over its militarization of man-made islands in the South China Sea, and defense intelligence officials have expressed concerns that China's growing military could lead an attack against Taiwan.
The waters have been hotly contested by countries in the region. China claims a huge chunk of the sea of its own in order to maintain control over an oil-rich choke-point where $5.3 trillion of trade passes annually.
On Saturday, Shanahan said that while the U.S. is willing to cooperate with China, behavior that erodes other nations' sovereignty and sows distrust of China's intentions must end.
"Competition does not mean conflict," he said. "Competition is not to be feared. We should welcome it, provided that everyone plays by internationally established rules."
He also restated America's distrust of Huawei, the world's leading network equipment provider and second-largest smartphone maker, saying the company is "too close to the government," which has laws requiring data to be shared.
"You can't trust that those networks are going to be protected," he said.
The defense secretary also vowed that the U.S. will remain invested in the Indo-Pacific region's stability, including maintaining a focus on denuclearizing the Korean Peninsula.
"We are where we belong. We are investing in the region. We are investing in you, and with you," he said.
Singapore Prime Minister Lee Hsien Loong said Friday that hardening attitudes of both the U.S. and China have been worrying, and urged the U.S. to prepare for China's stronger role in global trade while calling on Beijing to settle disputes in the South China Sea peacefully.
"The fundamental problem between the U.S. and China is a mutual lack of strategic trust. This bodes ill for any compromise or peaceful accommodation. But to go down the present path would be a serious mistake on both sides. There is no strategic inevitability about a U.S.-China faceoff," he said.